Run Money-Saving or Money-Making Process Improvement Projects for Yourself & Your Clients [How To]

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Just answered a question on Quora about process improvement methodology, and thought since we've been talking about looking at different topics here it'd fit. This is what some of you are saying you want...

I could release this as a WSO I guess, but I'll share it here for free. I've added a bunch of explanatory stuff onto my Quora answer, because there I was talking to a fellow Operations Management expert and I'm likely not here.

What I'm going to talk with you about is a process, and the individual steps of that process, that were the backbone of the Operations Management program I went through for two rather hellish years in 1994-1996. Virtually all of my problem solving power comes from this program. 50 people began the Opman program; 30 graduated. 40% failure rate. The workload was too high. 10 and 11 courses a term. They really beat this stuff into us.

So when you are wondering how to help your client or your own business in the most effective way, this is how you go about doing it. Note that this process kicks out the idea of a preconceived solution. You have NO idea what your client's problem really is...all you've seen or heard of are a bunch of symptoms. But symptoms are not root causes. We can run around trying to fix symptoms all day, all month and all year and really fix nothing.

That's why we have to get to the root problem. The thing that is causing all these other issues. All the smoke.

Let me share with you a very graphic and disturbing bit of imagery that will forever make the point of what I'm trying to teach you. I bet you remember this 10 years from now (sorry).

Imagine a homicidal man with a rifle has climbed into a campus bell tower. He begins methodically firing at students, injuring and killing several.

Other students, and faculty, notice this event. They freak out, duck into cover, and notify the police. Within minutes, several police vehicles arrive. The policemen deploy to identify the shooter's location and eliminate the threat.

Now let's freeze frame right here.

What are the symptoms that there is a problem?

In no special order, here are a handful:

1. The sound of rifle fire (gunshots)

2. Corpses -- relatively near and around the bell tower

3. Wounded people -- relatively near and around the bell tower

4. Police sirens & vehicles on one side of the campus and tower

5. Policemen fanning out from that one side of the campus and tower

6. Scared students hiding behind trees, buildings and other cover--and otherwise behaving in odd ways compared to normal

7. (If we could as invisible observers get close enough to view these unusual and notable pieces of evidence) Shell casings on the bell tower floor.


I'm sure you've thought of other symptoms.

Now if we concentrated on just one of these symptoms in an attempt to solve the problem, what would happen?

1. Sound of rifle fire - Let's eliminate the sound of rifle fire. It's scary. We don't want to hear it. Let's put up sound baffles, and issue earplugs to everyone.

2. Corpses - We can't have those lying around. They frighten people, and will eventually spread disease. Let's remove them to the morgue.

3. Wounded people - These casualties are making a lot of noise, making a mess, and disrupting the educational process. Let's organize them into one spot and treat them for their wounds.

4. Police sirens and vehicles - These alarm people and take up space that should be for other use on the campus. Let's get them out of here.

5. Policemen - Too many police around and many people get concerned about a "police state". Let's limit the number to one, OK?

6. Scared students hiding in cover - Let's create a training course to motivate the students, induce them to feel more safe, and encourage them to participate more in their campus activities.

7. Shell casings - Let's pick up this unsightly litter.


By concentrating solely on each symptom, we see the solution completely fails to deal with the root problem, don't we? In fact, each "solution" is ludicrous when we know what the root cause of them is. And in the act of implementing each of these solutions, we are probably sending more people into danger!

Even if we could figure out that a crazy man in the bell tower with a rifle was the real problem, by focusing on only one symptom we could be fatally misdirected. What if we only looked at the position of the police vehicles? Our attention would be in the wrong spot, wouldn't it.

Thus it is with your business improvement project. Don't just leap at fixing a symptom merely because you can.

So it is critical to dig. Get all the data you can. Ask "WHY?" Keep asking "Why?" Ask "Why?" seven or eight or nine times. Yes, you'll probably get down to "To save the world", but on the way you will come across your real problem.

Notice in the above example how ONE MAN, acting alone, is causing so much trouble for many, many other people. How many distractions away from the root cause are created by his actions. People miles away are likely caught up in a traffic jam they have no idea the source of. How much there is to look at and get caught up in "fixing" if you aren't careful.

A troll in the forum can act in the same way. They are calm and amused behind their troll facade. But many members are blowing up, billowing smoke and creating a big distraction. Should we censure and ban the members, who are creating the symptoms of all that smoke? Or should we look for the root cause?

Just because we can offer some kind of a solution, eg. a website, or SEO, or video marketing, or sales training, doesn't mean we should. If the client's business model is totally flawed, for instance, none of those things will really help.

Obviously, we need a repeatable and effective means and process for filtering through the symptoms and reach that core problem.


I was trained in the SREDIM methodology (say it kinda like "Shred-Em") and have used that for 20 years.

S = Select - what process improvement project should you work on? Where will you get the biggest bang for your buck? Gather data and analyze what's really going on--not what people tell you is going on--and determine your focus. This is about Prioritizing your effort.

R = Record - zoom in on your subject area and record all the data on what is happening. People will lie to you with hearsay, not because they are bad people but because they are interested in self-preservation. Telling you the truth could be a career-limiting move. But by recording the data, you will uncover what's really occurring.

For process flowcharting, use the accepted symbols (for anyone who's reading and isn't an Operations Management expert, this article explains: What do the Different Flowchart Shapes Mean?)

That way you and anyone else who comes after you can pick up your Recording work and follow along without getting confused.

E = Examine - This is where you analyze the data collected in the Record step. See if Pareto's Law applies. Are there outliers that should be taken into consideration? What does the data indicate in terms of the direction of a potential solution?

Be careful not to fall into the data mining trap. That's where you see and pull data that supports your pet theory, and ignore data that doesn't help. Be dispassionate. Follow the data and the facts, not your preconceived theories.

In this stage, you want to get at the PROBLEM. To this point, you have likely seen many SYMPTOMS of problems; these are not the same as the problem itself. The problem is the root cause of all those symptoms.

D = Develop - Flesh out several alternative solutions to the problem. Be as creative as you like. How does the shape of an egg apply to a solution for the problem? And the bars of a jail cell? These are examples of stimulating creative solutions. Do not come up with a single possibility and stop there.

Apply a weighted criteria of evaluation (also called weighted decision matrix; here's an example: Page on cornell.edu to determine which of the alternatives is best. This will take the appearance of a spreadsheet with the possible solutions listed down the side, and the features, benefits and other factors of those solutions across the top. Each factor will be weighted for importance. One solution will stand out with a higher score than the others, and it could very well be surprising which one.)

I = Install - Implement the new solution. Apply Change Management techniques. Expect and plan for hurdles, delays and the unexpected. Culture shifts may be required. Ensure that people are following the new process step by step, not substituting their preferred method--or even retaining the old one!

M = Maintain - Check back regularly to ensure the process is still "on course". People will get lazy. People may even find a better way to accomplish the process, eliminating a step! Record all this data, any changes and the reasons why. Confirm that the new process is achieving the purpose you started the project for in the first place. If not, it's back to Select.

You just got the core of a 2-year program that produces only a handful of graduates every year. This is a specialized course of study. Apply it to your business and your clients' businesses.

I hope this post has given you some new ideas, and look forward to discussing it.
#clients #improvement #moneymaking #moneysaving #process #projects #run
  • Profile picture of the author tonyscott
    Wow, that's deep ...

    It's hard to change company culture though, or the accepted practices of any organisation. Some people's jobs rely on maintaining the status quo.

    You need a lot of authority behind you to make that happen I guess?

    Tony
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    • Profile picture of the author Jason Kanigan
      Originally Posted by tonyscott View Post

      Wow, that's deep ...

      It's hard to change company culture though, or the accepted practices of any organisation. Some people's jobs rely on maintaining the status quo.

      You need a lot of authority behind you to make that happen I guess?

      Tony
      If you're a leader, it's your job to change those things!

      And yes, it can be tough.

      Managing Change is part of the curriculum I studied...and I have failed once or twice at culture change attempts as a manager. There has to be total buy-in by the top company leadership or it won't happen.

      For process change, it's not too bad; you involve the staff who are doing the work and get them to contribute their ideas. Then they have a stake (identifying stakeholders in the Record stage and involving them in the Develop, Install & Maintain stages is a critical part of it) in the outcome. And after all, they know a lot about what's going on--they're the ones doing the work!

      But as you point out, you need that buy-in (I wouldn't use the word "authority" because that implies--to me, at least--fiat from on high, which will always fail unless you're the owner and willing to fire every single employee and start again from scratch) from the top and then the front line staff...or your report will sit on a shelf. There's a lot to this, and that's why a) you can't learn it in a single article or post, and b) it takes years to get good at it.

      What I was really hoping people would get out of the post is the idea of not focusing solely on providing whatever solution you have just because you have it. IE. don't try to turn everyone you meet into a web design client simply because you are a web designer. Make sure you're solving the right problem first. We can solve the problem of reducing the noise people hear from gunshots--but if there's a sniper in the bell tower, we've got bigger issues...don't we.
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  • Profile picture of the author TerryLBD
    I'll hopefully have time to post more on this later, but that was a great post Jason.

    The best service you can provide is when you take the time to work out WHAT service to provide.
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  • Profile picture of the author Mark Singletary
    Thanks for sharing this.

    I was working with a company that had a major symptom - too little income/cash flow and this was causing big problems.

    They believed that the obvious fix was to do more marketing so that they could get more clients. As part of the marketing effort they also decided to open new locations.

    Well they did that and did it well and still had major problems. Why? The main reason for their symptom was that their expenses were too high/not enough profit per sale. So they were getting more sales due to the marketing and opening new locations but were going more and more broke with every new client.

    Not having enough clients wasn't the problem that needed fixing. They, actually, had too many. What they needed to do was to increase their profit per client/sale and there were tons of ways to do that but they didn't see that - they only saw the "obvious" solution.

    Mark
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    • Profile picture of the author Jason Kanigan
      Originally Posted by Mark Singletary View Post

      Thanks for sharing this.

      I was working with a company that had a major symptom - too little income/cash flow and this was causing big problems.

      They believed that the obvious fix was to do more marketing so that they could get more clients. As part of the marketing effort they also decided to open new locations.

      Well they did that and did it well and still had major problems. Why? The main reason for their symptom was that their expenses were too high/not enough profit per sale. So they were getting more sales due to the marketing and opening new locations but were going more and more broke with every new client.

      Not having enough clients wasn't the problem that needed fixing. They, actually, had too many. What they needed to do was to increase their profit per client/sale and there were tons of ways to do that but they didn't see that - they only saw the "obvious" solution.

      Mark
      Yes, many people would never suspect this, but increasing cash flow is a common cause of the death of businesses. If they're losing money every time they do something, getting more clients will put them out of business faster.

      When you look at restaurants for example, especially the mom & pop operations, it's often the case that they have not figured out their costing. Food cost, overhead, staff...they don't know any of these. They just pulled a number out of the air for the menu. And it means each dish is priced too low. So with every plate that goes out, they're digging their own grave a little more quickly.

      If a business takes off, it doesn't mean all good things. Increasing cash flow can also mean cash hiccups. Say you're a manufacturer. If you have to produce more because a new product is now heavily in demand, you might run out of supply of a critical part. Now you need a lump of cash to buy that part, if your supplier doesn't give you nice credit terms, and assuming more of that part is readily available. But you won't get paid for sales to cover those costs until you have made the complete product...it's a nasty Catch-22.
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